Since publication of the 7th edition, the U.S. Supreme Court has decided several environmental cases that are worth mentioning to your class. The Court decided three environmental cases during its October 2013 Term. These included two important Clean Air Act cases and a Superfund (CERCLA) case. On April 29, 2014 the Supreme Court decided EPA v. EME Homer City Generation. By a 6-2 vote with Justice Alito recused, the Court reversed a D.C. Circuit that had struck down EPA’s Clean Air Act regulations on interstate air pollution. On June 9 the Court held in CTS v. Waldburger Corporation that § 309 of CERCLA’s preemption of state statutes of limitations in lawsuits involving releases of hazardous substances does not extend to statutes of repose. The other Clean Air Act case involved a narrow portion of the D.C. Circuit’s Coalition for Responsible Regulation decision upholding EPA’s regulation of greenhouse gases from power plants. On June 23 the Court decided the case by a 5-4 vote. In an opinion by Justice Scalia the Court affirmed in part and reversed in part the D.C. Circuit’s decision. The Court held “that EPA exceeded its statutory authority when it interpreted the Clean Air Act to require PSD and Title V permitting for stationary sources based on their greenhouse-gas emissions.” The Court held that EPA “may not treat greenhouse gases as a pollutant for purposes of defining a ‘major emitting facility’ (or a ‘modification’ thereof) in the PSD context or a ‘major source’ in the Title V context.” However the Court concluded that EPA may “continue to treat greenhouse gases as a ‘pollutant subject to regulation under this chapter’ for purposes of requiring BACT for ‘anyway’ sources.” An edited copy of the Court’s decision is available here: Utility Air Decision.docx

The Court granted cert in only one major Clean Air Act case for the October 2014 Term - a challenge to EPA’s regulation of mercury and air toxic (MATS) emitted from power plants as hazardous air pollutants under § 112 of the Clean Air Act. On June 29, 2015 the Court decided in Michigan v. EPA that a provision in § 112(n)(1)(4) of the Clean Air Act requiring EPA to find that it is “appropriate and necessary” before regulating emissions of hazardous air pollutants from power plants required EPA to consider costs. In February 2015 the Court decided another case involving whether the prohibition in the Sarbanes-Oxley Act on destruction of “tangible objects” to impede an investigation applies to the destruction of undersized fish in a fisheries enforcement case. By a 5-4 vote, the Court decided that it did not.

During the Court’s October Term 2015, the Court had three cases on its docket with potentially significant environmental implications. In FERC v. Electric Power Supply, No. 14-840, the Court considered whether the Federal Energy Regulatory Commission has authority over demand-side reduction programs by electric utilities. This case was argued on October 14 and decided on January 25, 2016. By a 6-2 vote the Court reversed the D.C. Circuit and held that the Federal Power Act did give FERC the authority to regulate demand-response programs and that FERC’s rule was not arbitrary and capricious. In another case, Mississippi v. Tennessee, No. 143 (Orig.), the Court has appointed a special master to help it consider Mississippi’s claim that water consumption by the city of Memphis is sucking hundreds of billions of gallons of Mississippi’s groundwater across the state line into Tennessee. In U.S. Army Corps of Engineers v. Hawkes Co., No. 15-290, the Court will decide whether a determination by the Corps that certain property contains wetlands covered by the Clean Water Act is subject to judicial review.

During its October Term 2016, the Court decided a regulatory takings case. In Murr v. Wisconsin, No. 15-214, the Court surprised most observers by taking a case raising the “parcel as a whole” issue in takings jurisprudence. Following Justice Scalia’s death in February 2016, the Court repeatedly postponed setting a date for oral argument in the case. The Court finally heard oral argument in March 2017 and decided the case on June 23, 2017. In a 5-3 decision authored by Justice Kennedy, the Court held that three factors should be considered in determining the appropriate denominator for regulatory takings inquiries. Applying these factors, the Court rejected the petitioning property owners’ claims that the takings inquiry should be limited to a parcel they had not been allowed to develop instead of both that parcel and contiguous land they owned.

During its October Term 2017, the Court will hear National Association of Manufacturers v. Department of Defense, No. 16-299. In this case the Court will consider whether legal challenges to EPA’s “waters of the United States” rule clarifying the reach of federal jurisdiction under the Clean Water Act should be filed first in federal district courts instead of the U.S. Courts of Appeal. The U.S. Court of Appeals for the Sixth Circuit, which is hearing challenges to the rule, has stayed the litigation pending the outcome of the Supreme Court case.

OCTOBER TERM 2017 ENVIRONMENTAL CASES

NAT’L ASS’N OF MANUFACTURERS v. DEPT. OF DEFENSE, No. 16-299

Decision Below: 817 F.3d 261 (6th Cir. 2016)

Cert granted: January 13, 2017

To be argued: October 11, 2017

Question Presented: Whether the U.S. Court of Appeals for the 6th Circuit erred when it held that it has jurisdiction under 33 U.S.C. § 1369(b)(1)(F), the portion of the Clean Water Act's judicial review provision that requires that agency actions “in issuing or denying any permit” under Section 1342 be reviewed by the court of appeals, to decide petitions to review the “waters-of-the-United-States” rule, even though the rule does not “issu[e] or den[y] any permit” but instead defines the waters that fall within Clean Water Act jurisdiction.

On April 3, 2017, the Supreme Court denied a motion by the federal respondents to put the case on hold pending the Trump administration’s reconsideration of the “waters of the U.S.” rule.

OCTOBER TERM 2016 ENVIRONMENTAL CASE

MURR v. WISCONSIN, No. 15-214

Decision Below: 359 Wis.2d 675 (2014)

Cert granted: January 15, 2016

Argued: March 20, 2017

Decided: June 23, 2017

Question Presented: In a regulatory taking case, does the "parcel as a whole" concept as described in Penn Central Transportation Company v. City of New York, 438 U.S. 104, 130-31 (1978), establish a rule that two legally distinct, but commonly owned contiguous parcels, must be combined for takings analysis purposes?

On June 23, 2017, the Court decided the case in a 5-3 decision authored by Justice Kennedy. The Court held that three factors should be considered in determining the appropriate denominator for regulatory takings inquiries. These include the property’s treatment under state and local law, the property’s physical characteristics, and the property’s value under the challenged regulation with particular atention to the effect of the burdened land on the other holding. Applying these factors, the Court rejected the petitioning property owners’ claims that the takings inquiry should be limited to a parcel they had not been allowed to develop instead of both that parcel and contiguous land they owned. Chief Justice Roberts and Justices Thomas and Alito dissented. Justice Gorsuch did not take part in the consideration or decision of the case. A copy of the decision is available on the Supreme Court’s website at: https://www.supremecourt.gov/opinions/16pdf/15-214_f1gj.pdf

OCTOBER TERM 2015 ENVIRONMENTAL CASES

(1)FERC v. ELECTRIC POWER SUPPLY, No. 14-840

Decision Below: 753 F.3d 216 (D.C. Cir. 2014)

Cert granted: May 4, 2015

Argued: October 14, 2015

Decided: January 25, 2016

Questions Presented: (1) Whether the Federal Energy Regulatory Commission reasonably concluded that it has authority under the Federal Power Act, 16 U.S.C. 791a et seq., to regulate the rules used by operators of wholesale electricity markets to pay for reduction in electricity consumption and to recoup those payments through adjustments to wholesale rates. (2) Whether the Court of Appeals erred in holding that the rule issued by the Federal Energy Regulatory Commission is arbitrary and capricious.

Decision: By a 6-2 vote the Court reversed the D.C. Circuit and held that the Federal Power Act did give FERC the authority to regulate demand-response programs and that FERC’s rule was not arbitrary and capricious. Justice Kagan wrote the majority opinion joined by Chief Justice Roberts, Justice Kennedy, Justice Ginsburg, Justice Breyer, and Justice Sotomayor. Justice Scalia wrote a dissent joined by Justice Thomas. Surprisingly, the Court held that Chevron deference was not needed to uphold FERC’s rule because the Federal Power Act unambiguously gave FERC power to regulate activities that directly affect the wholesale market for electricity. A copy of the decision is available online at: http://www.supremecourt.gov/opinions/15pdf/14-840-%20new_o75q.pdf

Justice Alito recused himself from this case.

(2) MISSISSIPPI v. TENNESSEE, Original No. 143

Leave to file bill of complaint granted: June 29, 2015

This is the latest chapter in a decade-long legal battle in which Mississippi claims that the city of Memphis, Tennessee is stealing its groundwater. Mississippi filed a 300-page motion in 2014 asking the Court’s permission to file a new complaint seeking $615 million in damages. Mississippi claims that the city of Memphis, by pumping 140 million gallons of water a day from wells has created a “cone of depression” in the water table that sucks water across state lines into Tennessee. Mississippi estimates that 252 billion gallons of water belonging to it has been sucked into Tennessee. On Nov. 10, 2015, the Court appointed Eugene E. Siler, Jr. to serve as special master in this case.

(3) U.S. ARMY CORPS OF ENGINEERS v. HAWKES CO., No. 15-290

Decision Below: 782 F.3d 994 (8th Cir. 2014)

Cert granted: Dec. 11, 2015

Argued: March 30, 2016.

Decided: May 31, 2016.

Question Presented: Whether the United States Army Corps of Engineers' determination that the property at issue contains "waters of the United States" protected by the Clean Water Act, 33 U.S.C. 1362 (7); see 33 U.S.C. 1251 et seq., constitutes "final agency action for which there is no other adequate remedy in a court,” 5 U.S.C. 704, and is therefore subject to judicial review under the Administrative Procedure Act, 5 U.S.C. 701 et seq.

Decision: On May 31, 2016 the U.S. Supreme Court ruled unanimously that jurisdictional determinations (JDs) by the U.S. Army Corps of Engineers that property contains wetlands subject to § 404 of the Clean Water Act are judicially reviewable. The decision was not a surprise, even though most U.S. Courts of Appeals had ruled that the issuance of a JD did not trigger judicial review. In a majority opinion written by Chief Justice Roberts, the Court held that the issuance of a JD is “final agency action” that may be challenged in court under the Administrative Procedure Act because it is definitive in nature and has direct legal consequences. The Chief Justice noted that a memorandum of understanding between the Corps and EPA makes a JD binding on both agencies for five years. An extraordinary concurring opinion by Justice Kennedy, joined by Justices Thomas and Alito, harshly criticized the “ominous reach” of the Clean Water Act (CWA) and stated that the CWA “continues to raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property throughout the Nation.” An edited copy of the decision is contained in our 2016-17 Statutory and Case Supplement.

OCTOBER TERM 2014 ENVIRONMENTAL CASES

(1) YATES v. UNITED STATES, No. 13-7541

Decision Below: 733 F.3d 1059 (11th Cir. 2013).

Cert granted: April 28, 2014

Argued: November 5, 2014

Decided: February 25, 2015.

Question Presented: Whether the Sarbanes-Oxley Act of 2002, which makes it a crime for anyone who “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document or tangible object” with the intent to impede or obstruct an investigation, applies to a fisherman who threw undersized fish overboard after being told by a law enforcement officer to preserve them and proceed to port.

Court’s Decision: By a vote of 5-4, the Court reversed the conviction of the fisherman. In a plurality opinion authored by Justice Ginsburg, four Justices concluded that the ”tangible object” in Sarbanes-Oxley must be one used to record or preserve information. Justice Alito concurred in the judgement on similar grounds. Justices Scalia, Kennedy, and Thomas joined Justice Kagan’s dissenting opinion. A copy of the decision is available online at: http://www.supremecourt.gov/opinions/14pdf/13-7451_m64o.pdf

In a 5-4 decision with Justice Scalia writing the majority opinion (joined by Chief Justice Roberts and Justices Kennedy, Thomas and Alito), the Court held that the Environmental Protection Agency (EPA) unreasonably refused to consider costs in determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities. The Court held that the requirement in § 112(n)(1)(4) of the Clean Air Act that EPA determine that it is “appropriate and necessary” to regulate such emissions required EPA to consider costs before it decided to regulate mercury and other toxic air pollutants (“MATS”) from electric utilities. In dissent Justice Kagan argued that EPA repeatedly considered costs when it promulgated the regulations governing such emissions. Because the regulations were not stayed, most utilities already are in compliance with them and it is not expected that they will be vacated pending EPA reconsideration. A copy of the decision is available online at: http://www.supremecourt.gov/opinions/14pdf/14-46_bqmc.pdf

On remand, the D.C. Circuit decided on Dec. 15, 2015 not to vacate the mercury rule that was the subject of the successful challenge in the Supreme Court. Because EPA already has extensively considered the cot of the mercury regulations, it should have little difficulty complying with the Michigan v. EPA decision.

Questions Presented: Issue: (1) Whether the statutory challenges to EPA’s methodology for defining upwind states’ “significant contributions” were properly before the court, given the failure of anyone to raise these objections at all, let alone with the requisite “reasonable specificity,” “during the period for public comment,” 42 U.S.C. § 7607(d)(7)(B); (2) whether the court’s imposition of its own detailed methodology for implementing the Good Neighbor provision violated foundational principles governing judicial review of administrative decision-making; and (3) whether an upwind state that is polluting a downwind state is free of any obligations under the Good Neighbor provision unless and until EPA has quantified the upwind state’s contribution to downwind states’ air pollution problems.

Decision issued: April 29, 2014. By a 6-2 vote the Court reversed the D.C. Circuit and upheld EPA’s Clean Air Interstate Rule (CAIR). Chief Justice Roberts and Justices Kennedy, Ginsburg, Breyer, Kagan and Sotomayor joined Justice Ginsburg’s majority opinion. Only Justices Scalia and Thomas dissented. This is a huge victory for EPA. An edited copy of the decision is available here: EME Homer SCS.docx.

Question Presented: Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.

Decision: In an opinion by Justice Scalia the Court affirmed in part and reversed in part the D.C. Circuit’s decision. The Court held “that EPA exceeded its statutory authority when it interpreted the Clean Air Act to require PSD and Title V permitting for stationary sources based on their greenhouse-gas emissions.” The Court held that EPA “may not treat greenhouse gases as a pollutant for purposes of defining a ‘major emitting facility’ (or a ‘modification’ thereof) in the PSD context or a ‘major source’ in the Title V context.” However the Court concluded that EPA may “continue to treat greenhouse gases as a ‘pollutant subject to regulation under this chapter’ for purposes of requiring BACT for ‘anyway’ sources.” An edited copy of the Court’s decision is available here: Utility Air Decision.docx

(3)CTS CORP. v. WALDBURGER, No. 13-339

Decision Below: 723 F.3d 434 (4th Cir. 2013)

Cert granted: January 10, 2014

Argued: Wednesday April 23, 2014

Case decided: June 9, 2014

Question Presented: Whether the Fourth Circuit correctly interpreted the preemption provision (§ 309) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9658, to apply to state statutes of repose in addition to state statutes of limitations.

Decision: By a vote of 7-2 with Justices Ginsburg and Breyer dissenting the Court held that § 309 of CERCLA’s preemption of state statutes of limitations in lawsuits involving releases of hazardous substances does not extend to statutes of repose. An edited copy of the decision is available here: CTS Decision Edited.docx

OCTOBER TERM 2012 CASE DECIDED IN JUNE 2013 TOO LATE FOR INCLUSION IN THE 7TH EDITION OF THE CASEBOOK

Questions Presented: (1) Whether a land-use agency can be held liable for a taking when it refused to issue a land-use permit on the sole basis that the permit applicant did not accede to a permit condition that, if applied, would violate the essential nexus and rough proportionality tests set out in Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994); (2) whether the nexus and proportionality tests set out in Nollan and Dolan apply to a land-use exaction that takes the form of a government demand that a permit applicant dedicate money, services, labor, or any other type of personal property to a public use.

DECISION: 133 S.Ct. 2586 (2013) By a 5-4 vote the Court extended the Nollan/Dolan requirements to cases where government conditions approval of development permits on payment of mitigation fees even when no dedication of real property is sought. In his majority opinion Justice Alito emphasized that this did not call into question the constitutionality of property taxes. In dissent Justice Kagan claimed that the decision will subject local government to a flood of litigation by extending the Takings Clause “into the very heart of local land-use regulation and service delivery.” Justice Alito rejected this claim, noting that many states already apply Dolan's “rough proportionality” requirement to monetary exactions. A copy of the decision is available online at: http://www.supremecourt.gov/opinions/12pdf/11-1447_6j37.pdf

CHALLENGES TO EPA’S CLEAN POWER PLAN RULEMAKING IN THE D.C. CIRCUIT

In re Murray Energy Corporation (No. 14-1112, 14-1151)

West Virginia v. EPA (No. 14-1146)

Argued: April 16, 2015

Decided: June 9, 2015 (2015 WL 3555931)

These two lawsuits sought to halt EPA’s Clean Power Plan rulemaking to regulate greenhouse gas emissions from existing powerplants under Section 111(d) before EPA has even issued the rule. Even though EPA had taken no final action - it simply had issued a proposed rule - the petitioners argued that the court should use the All Writs Act to intervene because EPA does not have the authority to do what it was proposing to do. The D.C. Circuit panel contained the court’s three judges most skeptical of EPA regulations (Judges Griffith, Henderson and Kavanagh). In a unanimous decision authored by Judge Kavanagh the court dismissed the lawsuit based on the fundamental principle that until EPA finalizes a rule there is no agency action that is subject to judicial review under the Clean Air Act or the Administrative Procedure Act. In a concurring opinion Judge Henderson suggested that the panel should have left open the possibility of using the All Writs Act in other circumstances.

Stay Granted by U.S. Supreme Court on Feb. 9, 2016 by a 5-4 vote with Justices Ginsburg, Breyer, Sotomayor and Kagan dissenting.

Oral Argument Held En Banc for September 27, 2016.

These lawsuits seek judicial review of EPA’s Clean Power Plan, "Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units," 80 Fed. Reg. 64,662 (October 23, 2015). They were filed after EPA finalized the regulations and published them in the Federal Register. After the DC Circuit denied a stay of the rule on January 21, 2016, the petitioners filed a stay action with the U.S. Supreme Court. In an unprecedented action, the Supreme Court stayed the regulations. The regulation were “stayed pending disposition of the applicants’ petitions for review in the United States Court of Appeals for the District of Columbia Circuit and disposition of the applicants’ petition for a writ of certiorari, if such writ is sought. If a writ of certiorari is sought and the Court denies the petition, this order shall terminate automatically. If the Court grants the petition for a writ of certiorari, this order shall terminate when the Court enters its judgment.” For a criticism of the stay by the lead author of the casebook, see “In Blocking EPA Clean Power Plan Is the Supreme Court Wading Deeper into Politics?” The Conversation, Feb. 12, 2016 (https://theconversation.com/in-blocking-epa-clean-power-plan-is-the-supreme-court-wading-deeper-into-politics-54513).

The legal challenges to the Clean Power Plan were argued before the D.C. Circuit sitting en banc on September 27. The court decided to take the case en banc on its own motion without being asked to do so by any of the parties. Ten of the court’s eleven judges in regular service (all but Supreme Court nominee Merrick Garland) heard the arguments. Most observers believe that, based on the argument, EPA has a good chance of having the Clean Power Plan upheld. However, the new Trump administration is likely to try to rescind it.